Regulation D: Reserve Requirements of Depository Institutions (0% reserve requirement)

Regulation D: Reserve Requirements of Depository Institutions
Subject: Reg D reserves
Agency: Federal Reserve
Status: Interim final rule; request for comments
The Board of Governors of the Federal Reserve System (“Board”) is amending its Regulation D (Reserve Requirements of Depository Institutions, 12 CFR part 204) to lower reserve ratios on transaction accounts maintained at depository institutions to zero percent.

Recent Developments: For many years, reserve requirements played a central role in the implementation of monetary policy by creating a stable demand for reserves. In January 2019, the FOMC announced its intention to implement monetary policy in an ample reserves regime. Reserve requirements do not play a significant role in this operating framework. In light of the shift to an ample reserves regime, the Board has determined to reduce the reserve requirement ratios to zero percent effective March 26, 2020. This action eliminates reserve requirements for thousands of depository institutions and will help to support lending to households and businesses.

FR Doc: 2020-05806
Date proposed:
Comments due date:

May 26, 2020

Final rule effective date:

The amendments to part 204 (Regulation D) are effective on March 24, 2020. The changes to reserve requirement ratios are applicable on March 26, 2020.

Rule compliance date:
Agency release:

Related Reg Report item(s):

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